EUR/USD: stocks leading the way
|EUR/USD Current price: 1.0516
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The EUR/USD pair shows little life of its own this Monday, confined to a tight 50 pips range. A holiday in Japan kept most major pairs range-bound at the beginning of the day, with the exception of the Pound, hammered by UK's PM May comments on Brexit. Data released during the European session was centered in Germany, with Industrial Production up by 0.4% in November, below the expected 0.7%, and by 2.2% YoY. November's trade balance printed a surplus of €21.7B, better than the €20.8B expected, with monthly imports up by 3.5% and exports by 3.9%. In the US session a minor report, the Labor Market Conditions Index for December, and a couple of FED's speakers will gather all of the attention.
From a technical point of view, the pair presents a bearish bias, as it extended below a bearish 20 SMA, meeting short term selling interest around it, whilst technical indicators head modestly lower within negative territory, although lacking enough strength to confirm a steeper decline. In the 4 hours chart, the price is below a still bullish 20 SMA, whilst technical indicators hover around their mid-lines, offering no clues on what's next for the pair. The soft tone in equities keeps dollar's gains limited, but if Wall Street turns positive, the greenback will likely accelerate its gains, with the pair then poised to test the 1.0440/50 price zone.
Support levels: 1.0500 1.0445 1.0410
Resistance levels: 1.0530 1.0565 1.0600
GBP/USD Current price: 1.2137
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The GBP/USD pair fell to 1.2123, its lowest since late October, weighed by comments from UK's Prime Minister Theresa May, who hinted in an interview that the UK will fully leave the EU, including the Single Market. While her words were not the most clear on the matter, she reaffirmed that she will seek for the best possible deal in terms of trade, but also have control over its borders once outside the EU. The pair corrected partially its oversold conditions before resuming its slide, now approaching the mentioned low ahead of the US opening, and sharply bearish short term, given that in the 1 hour chart, the price is below a bearish 20 SMA, whilst technical indicators resumed their declines within oversold territory. In the 4 hours chart, technical indicators maintain their bearish slopes after entering oversold territory, whilst the price is now far below its moving averages, supporting the shorter term outlook.
Support levels: 1.2120 1.2080 1.2050
Resistance levels: 1.2160 1.2200 1.2235
USD/JPY Current price: 116.52
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Bearish potential increasing. The USD/JPY pair surged to a daily high of 117.53 at the beginning of the day, but the negative tone in European equities helped the yen to advance, now trading near its daily low of 116.46. The failure attempt to hold gains beyond the 117.00, has increased the risk of a bearish breakout for the upcoming sessions, particularly if the 116.00 level also gives up. Short term, technical readings support a bearish extension, as in the 1 hour chart, indicators head sharply lower, approaching oversold territory, whilst the price is below its 100 and 200 SMAs, both converging in the 116.90/117.00 region and slowly gaining bearish momentum. In the 4 hours chart, the price retreated after flirting with its 100 SMA, whilst technical indicators turned south and reentered bearish territory, also supporting further slides for this Monday.
Support levels: 116.40 116.00 115.65
Resistance levels: 116.85 117.20 117.55
AUD/USD Current price: 0.7336
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The Australian dollar remains strong against its American rival, with the AUD/USD pair firmly advancing above the 0.7300 level. At the beginning of the day, data released in Australia showed that building permits rebounded strongly in November, as approvals rose 7% following a revised 11.8% decline in the previous month. Adding support to the Aussie are base metals that extend their previous week advance. The 1 hour chart shows that the price is well above its 20 SMA, while the RSI indicator keeps heading higher around 60, as the Momentum indicator retreats modestly within positive territory, overall maintaining the risk towards the upside. In the 4 hours chart, the technical outlook is bullish, as the price bounced from its 20 SMA, whist technical indicators bounced from their mid-lines, all heading north.
Support levels: 0.7300 0.7260 0.7215
Resistance levels: 0.7350 0.7400 0.7450
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